The United Nations Development Programme (UNDP) has assured support to Bangladesh’s capital market by strengthening the thematic bond market, with a focus on promoting green and sustainable finance.
The assurance came on Wednesday following the signing of a memorandum of understanding (MoU) between the Bangladesh Securities and Exchange Commission (BSEC) and UNDP at the BSEC headquarters in Agargaon.
BSEC Commissioner Khondoker Rashed Maqsood and UNDP Bangladesh Resident Representative Stefan Liller signed the MoU on behalf of their respective organisations.
Speaking at the event, Khondoker Rashed Maqsood said BSEC, as the market regulator, remains committed to the continuous improvement of market governance.
“By strengthening good governance, enhancing transparency and reinforcing investor confidence, we are working to build a robust and credible market structure. Through partnerships with UNDP and other stakeholders, BSEC will continue its efforts to ensure a supportive, predictable and resilient regulatory environment,” he said.
Rashed also underscored the importance of establishing the capital market as a long-term source of financing, developing the bond market and expanding thematic bonds to support sustainable economic growth.
Stefan Liller said Bangladesh’s capital market holds significant potential to mobilise long-term capital for high-impact environmental and social investments through thematic bonds.
“To sustain the economic momentum of the past decade, manage the transition from least developed country status and avoid the middle-income trap, increased investment across sectors, particularly to address growing climate-related risks, is essential,” he said.
Liller noted that thematic bonds could act as a catalyst for mobilising both domestic and international capital to meet these challenges, adding that UNDP is committed to strengthening the enabling environment for Bangladesh’s thematic bond market through its partnership with BSEC.
Under the MoU, UNDP will provide technical assistance to the commission in areas including sustainable finance, introduction of investment taxonomies, and support to thematic bond issuers from pre-issuance to post-issuance stages.
The cooperation will also cover capacity-building and training for BSEC and other stakeholders, as well as knowledge exchange on thematic bond practices in emerging economies.
The partnership will further focus on ensuring proper utilisation of funds raised through thematic bonds, project monitoring, enhanced bond reporting capacity, and the introduction of impact measurement and management frameworks aligned with international standards.
It will also support the development of third-party verification mechanisms, risk mitigation for issuers, and the issuance of green, social, climate, sustainable and SDG-linked thematic bonds.
UNDP said these initiatives would contribute to mobilising long-term finance, supporting Bangladesh’s transition from an LDC to a middle-income country, and advancing the country’s long-term sustainable development goals.
Thematic bonds are widely recognised as a key financial instrument for channelling investment towards the Sustainable Development Goals (SDGs). They support access to long-term financing in capital markets and help diversify funding sources.
There are mainly three types of thematic bonds. Green bonds are used exclusively to finance projects with clear environmental benefits, such as renewable energy, biodiversity conservation, clean transportation and eco-friendly construction. Blue bonds, a sub-category of green bonds, focus on ocean-related projects with positive environmental, economic and climate impacts.
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Social bonds are issued to finance projects with a positive social impact, particularly for vulnerable groups such as the unemployed and people living below the poverty line. Gender bonds, a sub-category of social bonds, support projects that advance women’s empowerment and gender equality.
Sustainable bonds finance a combination of both green and social projects, integrating environmental and social objectives under a single financing framework.